Lender wants original appraisal changed

[The Bob]

From USPAP Q&A Vol 10, No. 5

Does Changing the Sale Price Result in a New Assignment?
Question:
I recently completed an appraisal for mortgage financing purposes in a purchase transaction and delivered the report to my client. My appraised value did not support the pending sale price. As a result, the purchase transaction was not consummated. However, one week later the buyer and seller entered into a new purchase agreement where the sale price coincided with my appraised value. My client asked if I can provide a revised report that includes the analysis of the newly agreed-upon sale price. To provide a revised appraisal report, must I consider the client’s request as a new assignment?
Response:
If the client does not require a more current effective date, USPAP would not mandate treating the request as a new assignment. However, if the client does require a more current effective date, the request must be treated as a new assignment.
In this example, regardless of whether the effective date is changed, the date of the report would have to change to accurately reflect the appraiser’s consideration of the newly obtained agreement of sale. Because the new purchase agreement was obtained after the date of the first report, the revised report would need to have a date of report that is the same as or later than the date the new purchase agreement was obtained by the appraiser

 

[CANative]

Now why didn't I think of that?

Wait a minute. I did think of that come to think of it.

Just don't let Webb get wind of this.

From USPAP Q&A Vol 10, No. 5

Does Changing the Sale Price Result in a New Assignment?
Question:
I recently completed an appraisal for mortgage financing purposes in a purchase transaction and delivered the report to my client. My appraised value did not support the pending sale price. As a result, the purchase transaction was not consummated. However, one week later the buyer and seller entered into a new purchase agreement where the sale price coincided with my appraised value. My client asked if I can provide a revised report that includes the analysis of the newly agreed-upon sale price. To provide a revised appraisal report, must I consider the client’s request as a new assignment?
Response:
If the client does not require a more current effective date, USPAP would not mandate treating the request as a new assignment. However, if the client does require a more current effective date, the request must be treated as a new assignment.
In this example, regardless of whether the effective date is changed, the date of the report would have to change to accurately reflect the appraiser’s consideration of the newly obtained agreement of sale. Because the new purchase agreement was obtained after the date of the first report, the revised report would need to have a date of report that is the same as or later than the date the new purchase agreement was obtained by the appraiser

 

[The Bob]

Now why didn't I think of that?

Wait a minute. I did think of that come to think of it.

Just don't let Webb get wind of this.

The only thing I would add to the advice from the AF, is that you should analyze BOTH contracts. Don't ignore the original PA.

 

[LI-Appr]

Guess what you review the contract as of day of inspection. They want to change it? Ok an UW problem not an appraiser problem. Why, just why do appraisers fell they must answer to all the BS put out by UWs. WE ARE NOT ATTORNEYS!! Even if we are DUCKS.

 

[hastalavista]

I understand the Q&A as it pertains to the OP's situation (when reporting appraisal results using the 1004 form) that:
1. If there is a change in effective date, another subject inspection is required.
2. If there is no change in effective date, another subject inspection is not required.

Is there disagreement on this?

 

[WMOORES]

Same effective date, additional addendum addressing negotiated sales price with new sales contract, new signature date, same file # = same assignment.
New effective date, new signature date, new file # = new asignment.

Both scenarios are USPAP compliant. Correct?

Jan 1st is just around the corner and with the new disclosure requirements, wouldn't the following also be true? With the first scenario you would not have to disclose that you have appraised the subject in the previous three years. With the second scenario you would have to disclose the fact of the previous assignment. Not sure why they are requireing this disclosure. Can't be over flipping schemes using the same appraiser. The refi market is dead. If you asked me to give you the month in which I last did an apprasaial for a refi, I would have to get back to you. Or are they just closing the doors on an empty barn?

 

[Ken Tamblyn]

Guess what you review the contract as of day of inspection. They want to change it? Ok an UW problem not an appraiser problem. Why, just why do appraisers fell they must answer to all the BS put out by UWs. WE ARE NOT ATTORNEYS!! Even if we are DUCKS.

I agree. It should not be our problem that the sales price changed after the appraisal. I would think that an investor would be impressed to see a contract price changed because the appraisal was lower. I would think that an investor would like to see both the contracts, and the appraisal that cut the value. An investor would be less impressed to see a contract price that is exactly the same as the appraisal value. It would be great to have a comment on the first page stating "Because of my appraisal, the prevoius contract price was reduced to my appraisal value."

 

[Mike Kennedy]

Same effective date, additional addendum addressing negotiated sales price with new sales contract, new signature date, same file # = same assignment.
New effective date, new signature date, new file # = new asignment.

Both scenarios are USPAP compliant. Correct?

Jan 1st is just around the corner and with the new disclosure requirements, wouldn't the following also be true? With the first scenario you would not have to disclose that you have appraised the subject in the previous three years. With the second scenario you would have to disclose the fact of the previous assignment. Not sure why they are requireing this disclosure. Can't be over flipping schemes using the same appraiser. The refi market is dead. If you asked me to give you the month in which I last did an apprasaial for a refi, I would have to get back to you. Or are they just closing the doors on an empty barn?

:icon_idea: new EDA, new site visit, new market conditions, new comp search to coincide with (or subsequent to) NEW EDA.

 

[WMOORES]

Mike,
Typically these situations arise within a relatively short period of time from the original effective date of the report. When I have run into this issue it has always been well under 30 days. Market conditions change on a gradual scale. You may have a pending sale that sold or an active listing that has gone into contract. Which may or may not change the range of value for the subject would fall in. But all in all there has been no significant changes in the market in such a short period time that would change the opinion of value. I do not do AMC work, these are clients that I have a long standing relationship with and are full fee. I do not wish to cause their clients the extra expense of a new appraisal fee. When in reality all that has transpired is that the seller got religion and understands that the value of the home was less than they thought it to be or hoped to sell it for, as evidenced by the appraisal.

If I still have your attention, I highly respect your opinion. Both of the scenarios are USPAP compliant, correct? Or do I need to throw my USPAP on the back of the throne and start reading it untill I know what the next paragragh is going to say. Again.

 

[Mike Kennedy]

Germane thread
http://appraisersforum.com/showthread.php?t=155542